BAIC Group Climb to New High in Fortune Global 500, Four Engines of Full Power

Date: 21 July 2017

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7.30am on 20 July 2017 at US Eastern time, i.e. 7.30pm 20 July 2017 at Beijing local time, the "Fortune" Magazine officially announced the “Global 500 List for 2017”, in which the BAIC Group ranked number 137with its 61.13 billion US dollars in operating income, jumping over 23 places by previous year.

BAIC Group held a press conference - "2017 BAIC Group Listed Again in Fortune Global 500 List" on 21 July afternoon, in which Ms Zhang Dan, China Representative of Fortune Global 500 Ranking announced that BAIC ranked the 137th place and Mr Zhang Xiyong, General Manager of BAIC Group introduced the development of the group and answered questions from media as well. Dozen of domestic and foreign mainstream media, chief executives from related departments of the group headquarter and from main member units attended the press conference.

BAIC Group entered the Fortune Global 500 List for the first time in 2013 by ranking the 336th. From then on, the group realized five appearances in the list consecutively, climbing over 199 places totally. Over the past five years, BAIC Group seized the opportunities, anchoring development goals, achieved a series of leapfrog development by its clear development strategy and hard working. In 2012, the group sold 1.71 million vehicles, realizing the sales revenue of RMB 210 billion yuan. By 2016, the group achieved largely-raised performance, when the sales revenue reaching RMB 400 billion yuan after selling 2.85 million cars.

By 2020, BAIC Group will realize to enter the first echelon of the automotive industry in China both in scale and strength, and to be one of the world top 12 automotive companies and climb at the top 100 in the Fortune Global 500 List as well.

In the past five years, BAIC Group presented a picture of fast growth, good quality and efficiency, strong comprehensive strength and excellent brand image. Collectivization progress, international development, forward-looking innovative practices and unique corporate culture compose four strong engines for the group’s sustained and rapid rise.

Engine 1: Collectivization

Resource integration capacity will be the key to win the future competition. BAIC Group's rapid and healthy development, first of all,benefits from the strong resource integration capabilities brought out by its collectivization development strategy.

2017 is the 10th anniversary for the BAIC Group to implement the "Collectivization" strategy. In 2007, the group established the "Go Collectivization, For Leapfrog Development" strategy. In 2010, the group set forth the goal of creating a "Strong BAIC, Scale BAIC, World BAIC, Harmonious BAIC" and formed the fast grow model that took strategy as the guide, resource integration as the core, capacity-building as the basis and group control as the important carrier. After continuous efforts, BAIC Group established the "Big BAIC" pattern that is unprecedented in the group’s progress history and also completed the accumulation from small to large as well.

Over the past decade, BAIC Group has been keeping integrating the internal and external resources, combining the international cooperation and independent development, adjusting and optimizing the product structure and industrial structure, and enhancing the comprehensive competitiveness of the whole value chain. Comprehensive competitiveness also formed in R&D system, manufacturing system, marketing system, service system, talent system, corporate governance, corporate culture and other aspects. Benefiting from the collectivization strategy, the domestic brands of BAIC build up a differentiated brand structure with the "BAIC Motor" and "Changhe Motor" as its two-wheel driver. Meanwhile Beijing Benz, Beijing Hyundai and other joint ventures maintain healthy development, and new highlights constantly emerge from new energy vehicles, automobile components, automobile service trade, automobile finance, general aviation, travel service platform and other emerging industries as well as overseas business and other business segments.

Engine 2: Internationalization

To enhance international competitiveness and influence, BAIC Group firmly implements the internationalization strategy and persists in combination of "Bringing In" and "Going Out". The group continues to deepen its cooperation with international partners Daimler AG from Germany and Hyundai from Korea, and the joint ventures Beijing Benz and Beijing Hyundai contributed an important force for the group’s sustained growth and upgrade. Deeply plowing in the China market for fifteen years, Beijing Hyundai gained recognition from 8 million users. Beijing Benz, by its profound accumulation, achieved outstanding success, becoming a model of Sino-German industrial cooperation. In 2017, witnessed by the national leaders of China and Germany, BAIC Group and Daimler Group signed a new cooperation agreement, and the two sides will have deeper collaboration in the new energy vehicle sector.

(BAIC Group and Daimler Group signed framework agreement for deeper cooperation on 5 July)

The internationalization strategy brings the global high quality resource support to BAIC Group’s comprehensive development of multi-type operation. Besides overseas R&D centers already set up in "Six places of four countries", BAIC Group also starts its cooperation with Italy Leonardo Group and New Zealand Pacific Aerospace Co., Ltd., entering the aircraft manufacturing, sales, operation and service business, and actively exploring the development blue ocean for the general aviation industry chain. In 2017, BAIC Group set up aircraft route maintenance company with Air France-KLM Group, aggressively marching into the high-end aviation service industry.

BAIC Group also regularly held overseas recruitment for high-level talents, aiming at appealing global elitists. Currently BAIC Group has gathered experts both from the national "Recruitment Program of Global Experts" and the Beijing "Overseas Talent Pooling Program", of which the total number accounts 85% among the overseas high-level staff from state-owned enterprises in Beijing, facilitating the group to become a benchmark for innovation in the capital city.

The internationalization strategy pushes the brands of BAIC Group to the world. BAIC Group positively responds to the nation’s "Belt and Road" Initiative and actively expands its overseas layout. In the field of commercial vehicles, Foton Motor is a complete car enterprise to early layout the foreign markets within the group and now the group’s passenger car business has also fully expand overseas. The overseas layout of BAIC Group that focuses on South Africa, Southeast Asia, Egypt, Mexico and other places highly corresponds to the panning direction of the "Belt and Road" Initiative, of which the advantages have already started to appear.

Engine 3: Forward-looking Innovation Practices

Innovation is the source of power for enterprise development. BAIC Group uses forward-looking innovation practices to promote transformation and upgrade. In 2016, 4053 invention patents and 2741 authorized patents were born in the group. Facing the current and future changes and trends in the global innovation environment, BAIC Group upholds the "Open Innovation, Integrated Innovation, Collaborative Innovation" concept and constantly achieve new breakthroughs both in technology and business models through persistent explorations and practices.

With far-ahead planning in strategy and real work in action ,BAIC Group grasps the "Electric, Intelligent, Networking" trend to promote technological upgrade. The group continues its leading edge in the field of new energy vehicles, whose pure electric vehicle sales rank the first place in China four consecutive years. Besides, the group vigorously builds up the charging security system, develops the "Wisdom Hui Housekeeper" - an all-weather exclusive service pure electric vehicle service system, promotes the smart exchange model, gains the first new energy vehicle production qualification in China and establishes the new energy automotive industry development fund. The "C30 pure electric passenger car key technology’s integrated development and application " project got the first prize of the "China Automotive Industry Science and Technology Award".

In the fields of intelligent driving, Internet of Vehicle, forward-looking technology, BAIC Group actively makes cross-industry cooperation with the Internet technology giants. Based on the cooperation, the group formulates the "NOVA-PLS" intelligent development strategy to build a comprehensive car-centered intelligence system, creating systematized intelligent tools for travels and urban life.

(Family portrait of BAIC new energy models)

Keeping the same pace with technology innovation, BAIC Group has also been strengthening the innovation practices of new business models. Relying on the technology achievements from new energy and intelligent fields, as well as the accumulation from the innovative operation of the time-sharing leasing business for many years, BAIC Group innovates its business model by establishing an intelligent platform for integrating travel services and focuses on two major business segments - travel and service - to mainly conduct core businesses including car rental, finance leasing, taxi, online car-hailing and etc. The group is also expanding to other more services, sets up a full-range travel business cluster gradually, forms the closed-loop development for the BAIC-featured industrial chain consisting of people, cars, roads, networks and commerce. All of these will become a new force for BAIC Group to proceed with its transformation and upgrade.

Engine 4: Corporate Culture

Corporate culture is one of the determining factors for enterprise’s destiny in the long run. BAIC Group, with its history of nearly six decades in creating and manufacturing cars, accumulates deep BAIC-characteristic culture gene, on which the group makes its achievements today. The future competition will also be decided by how the group to keep pace with the times to enrich its own new cultural connotations.

BAIC Group establishes its "Quality BAIC" corporate image by the "Quality Is The Soul" quality concept and the "Quality First, Excellent Operation" quality culture. Meanwhile, the "Tough, Persistent, Dedicated, Supreme" BAIC craftsman spirit has been infiltrated in all aspects of the group. Mr Xu Heyi, Party Secretary and Chairman of BAIC Groups pointed out: "We shall forge the BAIC craftsman spirit that is of BAIC Group characteristics, and let it be inherited from generation to generation so that it can be the cultural gene and spiritual support for the group’s long-accumulated foundation and achievements."

(An aerial photo of Beijing Hyundai Cangzhou Factory)

As the backbone automotive enterprise in China and the largest state-owned enterprise in Beijing, BAIC regards its own missions and responsibility to implement the national strategies and to promote the coordinated development of economy and society. Actively responding to the "Beijing-Tianjin-Hebei Coordinated Development" strategy, BAIC Group implements the requirements of the Beijing "Four Centers" construction to adjust its industrial layout. Apart from vigorously developing high-tech manufacturing and service industries in Beijing, the group also sets up the Beijing Hyundai 4th factory in Cangzhou of Hebei Province to drive the logistics for vehicles and parts, service trade, automobile finance and related industries of the local market. This achieves the "1+1>2" collaborative development effect between Beijing and Hebei, and makes an important contribution to creating the new win-win phase for the regional coordinated development for Beijing, Tianjin and Hebei .

It is the essential requirement of the Socialism with Chinese characteristics that the results of development shall be shared by the people, which is also the responsibility for the state-owned enterprises in China. BAIC Group concerns about public welfare work, always cares for people's livelihood closely, and in adherence to the "BAIC · Sunflower" public welfare brand concept continuously carries out student support and disaster relief and other public welfare program to repay the society. On the basis of development, BAIC Group also continues to increase its investment in culture and sports and other social projects. The Beijing volleyball made a good record with the support from BAIC Group. The group reached strategic cooperation with China Open (Tennis), the Beijing International Marathon and the National Parachute Team. The champions of the China EV Rally, Qinghai Lake and the China Around Taklimakan (International) Rally were also won by BAIC Group. In 2017, BAIC Group plunges its concentrated force into the culture field. The group launched "The Readers", an outstanding cultural and emotional TV show, in collaboration with CCTV, leading the cultural trend, and also created the "BAIC Blue Olympic Park Summer Music Season", a performance brand, enriching the cultural life for citizens in the capital city.

To lead with collectivization and internationalization strategies, to drive with innovation and to move stably and further with cultural taste. BAIC Group will continue to advance the collectivization strategy at a higher standing level, continue to base on forward-looking innovation and practices, keep vigilant in current peace times (repeated 3 times), enhance the sense of crisis and urgency, deepen the transformation, make all efforts and endeavors, and constantly improve international competitiveness and influence, make new contributions to boost the the local automotive industry "From Large To Strong" and for the economic and social development of the capital city.